Wednesday, June 13, 2007

Per diem update

The per diem (court coverage) business is getting tougher all the time. Here are the main reasons:

1. The overall volume of personal injury cases is down. This is primarily due to the vigorous defense on these cases by the insurance carriers. It has become unprofitable for most plaintiff firms to accept the lower level cases, so now, these cases are simply not in the system. This puts pressure on the per diem business because not only are there less "jobs" to cover, but many firms who used to use per diems are now covering the appearances "in house".

2. Many of the civil defense lawyers are now victims of their own success. They beat the tar out of the plaintiffs, so now there are less cases, and the insurance companies have either laid off lawyers or stopped hiring. Many of the displaced lawyers try per diem work. Some can make a go of it and some can't. The bottom line is there is more competition for less available work.

3. The competition for work has kept the fees down. I would love to raise my per diem fees, but the problem is all my competitors would love me to do that, so they could undercut me. I recently told another per diem lawyer that in this environment I would lower my fees before I raise them. He seemed to think I was nutty. He can follow his business model, I'm going to stick with mine.

4. Many of the per diem players are marketing and advertising much more than before. I suspect some of them have actively pursued my attorney accounts, and sometimes in the course of marketing they "inadvertently" have gotten in my kitchen and taken some clients. Fair is fair, and my view is it works both ways and evens out. In the end, quality will tell. One thing is for sure, the per diem business is no different than any other, you have to service your existing clients AND market for new business.

5. Some of the downturn in lawyer business spills over into accounts receivable. There are some really bad attorney clients in this biz. I've learned who they are, the hard way. I am tempted to name names, but I won't. What I will do though, is let my new competitors scoop up all THAT business, and then struggle to get paid from these deadbeats. Here's when I knew the depth of sleaze from one of these firms.......He ran up a $10,000 tab with me (you may ask, how did you let that happen? and the way it happens is every so often they send in $3-4000 when you really need it, so you stick with it, and then it gets out of hand) and forced me to sue him. We negotiated a settlement, which I had to chase him for. After it was all over, I called him and said "No hard feelings, I have a business proposal.....I know you have volume in Queens, and I would like the work, but I must get paid, SO, I will give you very VERY low prices, lower than anyone else, EVER, and I only have one condition.....I want to bill a credit card once a month". He said no. He then proceeded to stiff my biggest competitor for $6000!!!!
Yipes!!!! and I am usually the guy who defends other lawyers.

The business still has a lot going for it, but anyone thinking about trying it should remember, it IS a business.

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